ALERT: EXCLUSIVE: FCC Dems Narrowing Net Neutrality Gaps

Share Federal Communications Commission Chairman Julius Genachowski is making progress in narrowing gaps with his two Democratic colleagues over his controversial plan to adopt sweeping new rules for the Internet, National Journal has learned. But with the talks very fluid, and differences remaining, there's still a possibility that the regulatory initiative could be pulled at the last minute from the agenda of Tuesday's commission meeting.

Genachowski needs the support of Michael Copps and Mignon Clyburn to approve his "network neutrality" proposal, which would create enforceable rules designed to protect the openness that is the Internet's hallmark. While both Copps and Clyburn are net neutrality advocates, they've complained that the chairman's framework cuts too many breaks for major telecommunications and cable providers of broadband. The two Republicans on the five-member commission remain staunchly opposed, arguing that the proposed rules amount to unnecessary government regulation of the Internet.

An FCC source familiar with the negotiations said progress is being made in three key areas: addressing concerns about wireless carriers, limiting Internet toll lanes and adding protections for a new online pricing model.

Responding to the complaint that the proposal, announced Dec. 1, would not bar discriminatory blocking of rival applications and services by wireless carriers. Genachowski appears willing to have the FCC monitor the situation over the next two years. Critics have noted that the proposed rules are more stringent for wireline carriers, even though Americans are rapidly gravitating to mobile connectivity.

Wireless carriers have endorsed (albeit grudgingly) the net neutrality plan, offering Genachowski critical industry support that can help dampen congressional criticism. They insist they need maximum flexibility in operating their networks due to capacity constraints, and won't block competitors.

If clear violations emerge, the agency would promulgate new protections down the road, the source said. Genachowski's side has argued during closed-door negotiations that since the wireless market is still developing, tougher rules shouldn't be applied now. Despite the progress, the source said the fate of the net neutrality proposal hinges on details to be ironed out over wireless service.

The FCC chairman also appears willing to limit the creation of toll lanes on the Internet for companies willing to pay for faster transmissions -- a structure known as "paid prioritization." As a result, the agency might specify scenarios under which such lanes would be barred because of concern about harm to consumers or competition. The chairman originally green lighted these arrangements in his announcement, raising worries that entities unable or unwilling to pay for priority treatment would be relegated to slow lanes.

Regarding a new form of Internet pricing that would charge customers based on the bandwidth they use, the chairman also may be ready to give some ground. Usage or metered pricing is allowable now, but most broadband providers have been hesitant to offer it because heavy Internet users would be slapped with higher fees -- a result that could draw brickbats from Washington. Genachowski, who endorsed the model as part of his net neutrality announcement, now appears receptive to placing some limits on it. For example, the FCC would prohibit a broadband provider from imposing exorbitant metered pricing fees on Netflix customers if the goal is to prompt them to switch to its less costly video service.

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